Google's Nexus 7 costs $152 to build, iSuppli says

A teardown of the tablet finds the device to look a lot like Amazon's Kindle Fire. The profit margin seems mighty slim, so the next question is: How many can Google sell?

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The components that make up the Google's entry-level Nexus 7 cost roughly $152, according to a teardown study by IHS iSuppli.

The results, which were first reported by AllThingsD, suggest the possibility of a minor profit from the device, which will retail for $199 and come with 8 gigabytes of storage. It goes on sale this month.

A 16GB model, which sells for $249, costs $159.25, with the higher storage making the difference. iSuppli told AllThingsD that Google would most likely break even on the 8GB model and record a profit on the 16GB one.

The Nexus 7 is Google's answer to Apple's iPad and Amazon's Kindle Fire, and marks the first time the Internet search giant has gotten into the tablet business itself. The move comes after several of its Android partners have failed to make a dent with their own tablets. Beyond potentially jump-starting demand for Android tablets, Google hopes to use the device as a showcase to draw in developer support.

While past tablets were priced much higher, Google is following Amazon's route and opting for a more affordable laptop. As a result, the Nexus 7 shares many similarities with the similarly priced Kindle Fire.

The Nexus 7, however, does boast higher-end components such as Nvidia's Tegra 3 quad-core processor, a better display, and a camera, which the Kindle Fire lacks.

Amazon may come back with its own upgraded device. A Kindle Fire 2 is widely believed to be in the works. Apple is also believed to be working on a lower priced smaller iPad as well.

 

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